I'd appreciate some insight as to whether the hardware & performance of the custom build is worth the price difference as well as the possible complications that come from building your own as opposed to upgrading a pre-built system.
the only "fault" i could see with the HP build is that i suspect it has a H61 motherboard with just 2 ram slots whereas with the custom build use are using a Z77 with all the bells and whistles of an ivy bridge platform.
I would not trust a prebuilt PC with anything gaming related. The components used are low-tier, basic ones that are mass produced with cheap materials to make as much profits to the company as possible.
Even if you replace the PSU, rest of the components are cheap stuff, and you'll lose warranty by doing the replacements anyway - so why not just build one of your own, and have full warranty for all parts.